Automatic Increase in Benefit Provision
Definition - What does Automatic Increase in Benefit Provision mean?
An automatic increase in benefit provision is an endorsement to disability insurance policies that increases the monthly benefit by a percentage previously agreed upon for a certain period of time.
Insuranceopedia explains Automatic Increase in Benefit Provision
An automatic increase in benefit provision dictates the exact percentage by which the policyholder's monthly disability payment would increase for a predetermined amount of time. Because it increases the coverage amount, the addition of this rider increases the premium as well. The idea is that it would help offset inflation so that the monthly benefit agreed upon at an earlier date would retain a similar monetary weight at a later date. It is one way to ensure a stable income that can help the policyholder meet their daily needs in case they acquire a disability in the future.
Key Trends in International Private Medical Insurance for 2016